However, Dairy Crest (LSE: DCG) bucks this trend. Unlike its peers, shares in the company currently trade at a mid-teens earnings multiple compared to the likes of Unilever, which currently trades at a forward P/E multiple of 20.4.

I believe that Dairy Crest does not deserve this lowly valuation. Indeed, as the company reported in a trading update today, sales are expanding steadily, and the outlook for the group is bright. 

Too cheap to pass up

The producer of dairy brands Cathedral City, Clover, and Country Life today reported that for the nine months to the end of December, revenue from these key products rose 7% year-on-year. A spreadable version of the company’s leading cheese brand, Cathedral City has won ‘Product of the Year 2018’ in the UK cheese category. Meanwhile, all of the group’s spreads brands reportedly continued to gain market share throughout the period.

The company is set to report its full-year results for the 12 months to the end of March 2018 at the end of May. City analysts are expecting the firm to report earnings per share growth of 4% and earnings growth of between 5% and 6% for the next two years.

Nevertheless, despite this steady growth, and the company’s defensive nature, the shares trade as a relatively modest forward P/E of only 15.5, falling to 14 for the year ending 31 March 2020. As well as this modest valuation, it also supports a dividend yield of 4% and the payout is covered 1.6 times by earnings per share. 

All in all, I believe this defensive income stock could make a great addition to your portfolio.

Enormous opportunity 

Small-cap biotech firm Angle (LSE: AGL) flies under the radar of most investors, but I believe you should not overlook this future growth monster.

It is a leader in the process of liquid biopsy, which involves searching for cancer cells in blood samples, or pieces of cancer DNA floating in the bloodstream in an attempt to find the illness at an early stage. 

The market for any potential products is massive and Angle is already making a dent. According to the firm’s interim results for the six months to 31 October, 145 of its Parsortix liquid biopsy systems have been deployed around the world (up from 120 in the previous period). Further, during the period the company completed two large-scale ovarian cancer clinical studies, which demonstrated “potential for a Parsortix-based blood test to significantly outperform current standard of care.”

Unfortunately, as this business is still in its early stages of development, for the next few years City analysts are expecting it to report losses, although sales are expected to leap 600% to £7.8m by 2020, from an estimated £1.1m for the fiscal year ending 30 April 2018. A recent placing that raised £14.4m net of expenses should give the company enough financial firepower to be able to keep the lights on for next two years as it progresses towards profitability.

The post 1 cheap income stock and one growth monster I would buy for 2018 appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in Unilever. The Motley Fool UK owns shares of and has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Considerable potential

Angle said there was an increase in research use, with many leading cancer centres “evaluating and adopting Parsortix into their research and clinical studies“. Currently, this provides Angle’s revenue, which is relatively low — just £219,000 for the six months ended 31 October — but the commercialisation opportunity is far more substantial.

To this end, the company has initiated two 200 patient studies in Europe and the US for its first clinical application — the detection of ovarian cancer. In a separate release, it reported a positive interim evaluation of the first 50 patients in both studies and said headline data from the full studies is expected to be available in Q2 this year.

There are no concerns about Angle’s immediate funding needs, as it raised £10.2m at 64.5p a share last May and today reported cash on the balance sheet of £9.7m at 31 October.

Speculative proposition

The company’s market cap is £39m at its current share price of 52p, compared with a high of over 100p a couple of years ago. This is a speculative investment proposition, so the shares could easily double on sentiment alone, but such a rise could also be justified by fundamentals in due course.

But, of course, any setback in commercialising its technology could lead the shares to plummet. Angle estimates that the market value available to it, if its ovarian cancer test were fully adopted, would be in excess of £300m a year.

With the company also working to address breast cancer and prostrate cancer, there’s clearly considerable potential. But, at this stage of its development, it can only be rated as a ‘speculative buy’.

Advanced retreats

Another pioneering — and currently loss-making — small cap in the cancer field is Advanced Oncotherapy (LSE: AVO). It’s valued about the same as Angle by the market, having a market cap of £41m at a share price of 57p.

Advanced Oncotherapy saw its shares crash 20% on Tuesday after it revealed that it had been informed the day before that Chinese company Sinophi Healthcare “wished to terminate” an order for Advanced Oncotherapy’s LIGHT proton therapy machines.

However, Sinophi had already indicated this in an update on its website as long ago as 26 November, citing “delays in the proton therapy machine delivery schedules”. Furthermore, Sinophi suggested that Advanced Oncotherapy didn’t have “a working prototype capable of commercialization” and that its technology was “still in the research and development stage”.

Serious concern

If correct, this has to be a serious concern for investors, not only because the technology is less developed than imagined, but also because an empty order book isn’t going to help Advanced Oncotherapy in negotiations with potential lenders for funds it desperately needs. It’s also going to need cash for legal costs, because it believes Sinophi has “no legal basis” for terminating the orders and will “take appropriate action”.

For these reasons, I believe Advanced Oncotherapy is best avoided by investors.

The post Could this small cap double after posting a £2.7m LOSS? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
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G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Clearly, this is excellent news for the company and has been warmly received by the market. However, the company’s shares are still down by 45% in the last year and with Filtronic being a loss-making entity in each of the last two years and remaining in the red in the first half of the current year, investor sentiment could come under a degree of pressure in the near term.

Despite this, Filtronic is progressing through a major restructuring and could return to profitability over the medium term. However, it may still be prudent to await further updates regarding its financial performance before buying a slice of it.

Also rising by more than 10% today are shares in Angle (LSE: AGL). The specialist medtech company has stated that the results of Barts Cancer Institute’s ongoing work with its Parsortix liquid biopsy system have provided evidence in support of the use of Parsortix in the detection and assessment of prostate cancer.

In fact, the Parsortic system may assess the aggressiveness of prostate cancer through a simple blood test, which is crucial since it means that men with low level disease could avoid unnecessary and potentially harmful solid biopsy and surgical intervention. Similarly, men with an aggressive form of the disease could be fast-tracked for further investigation and treatment.

Clearly, this is good news for Angle and opens the potential of another highly differentiated liquid biopsy application for Parsortix in a key area of medical need. As such, the company’s shares could continue to rise and while they remain relatively high risk, they may be of interest to less risk averse investors.

Meanwhile, shares in ReNeuron (LSE: RENE) are also among the top risers today. That’s despite there being no significant new flow having been released by the company, although the stem cell therapy company may still be benefitting from improving investor sentiment following its positive news flow of last week.

This was where the first patient had been treated with its cell therapy candidate for a disease which causes blindness called retinitis pigmentosa. It marks a significant milestone for the company, partly because it marks the commencement of clinical development activities in the US, which could become a major market for ReNeuron. And while the outcome of the trial is clearly a known unknown, there is the potential for ReNeuron to continue to deliver the share price gains of the last three months, where is has risen by around 20% due in part to gradually improving investor sentiment.

The post Are Today’s Double-Digit Rises Just The Start For Filtronic Plc, Angle plc And ReNeuron Group Plc? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Big market, slow growth

The Parsortix system is the specialist MedTech company’s flagship product that uses patented micro-fluidic technology to capture and harvest circulating tumour cells from blood. Angle believes that the addressable market for this kind of product could be worth as much as £250m, although the company didn’t reveal any details about the customers or the revenue derived from the initial sales reported today. Angle expects revenue from the medical research tool to be initially modest as it grows over time.

City analysts believe that the Parsortix system could generate sales of £340,000 for the year to 30 April 2016, which works out at around four-to-five months of sales. Next year, sales are expected to pick up and analysts are predicting Angle will generate revenues of £2.2m for the full-year. However, even though sales of Angle’s Parsortix system are set to take off over the next 12-to-24 months, analysts expect profit to remain elusive for the time being. 

So for now Angle remains a speculative play. Until the company is able to show that it can generate a consistent profit, its shares aren’t suitable for risk-averse investors. 

Another strong performance

In what’s become something of a regular occurrence for Advanced Medical Solutions (LSE: AMS), the company issued another upbeat trading update today, reporting that it was on track to meet the market’s expectations for revenue and profitability for full-year 2015.

What’s more, Advanced Medical said today that the regulatory approvals received this year for its new antimicrobial foams, together with the clearance to market its sutures in the US, are expected to contribute to growth in 2016.

Commenting on today’s trading update, Chris Meredith, CEO of AMS, said:

“The Group continues to deliver strong organic growth supported by a pipeline of new products coming out of our Research and Development teams. We are confident that AMS is very well positioned to deliver further growth.”

If you’re looking for an investment to revolutionise your portfolio’s returns, Advanced Medical could be an excellent choice. The company has consistently outperformed since 2009. Net profit has grown at a compound annual rate (CAGR) of 36% since 2009, and reported earnings per share have expanded at a CAGR of 27.7%. Over the same period, the company’s shares have gained 450%, outperforming every major stock index by several hundred percentage points. 

That said, Advanced Medical’s shares don’t come cheap. They’re currently trading at a forward P/E of 26.9, falling to 25.3 for 2016 and support a dividend yield of 0.4%. Still, sometimes it’s worth paying extra for quality. 

The bottom line

Based on my analysis, Advanced Medical looks attractive after today’s update, but risk-adverse investors should avoid Angle. 

The post Is It Time To Buy Angle plc & Advanced Medical Solutions Group plc? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

All three firms have seen their share prices move sharply since markets opened, so I’ve been taking a closer look at each company’s news.

Mothercare

Shares in Mothercare fell by 7% this morning after the firm reported a 5.2% decline in group sales.

Although UK like-for-like sales were up by 1.3% and online sales rose by 24%, total UK sales fell by 0.9%.

UK store space fell by 5.3% as loss-making stores were eliminated, but Mothercare chief executive Mark Newton-Jones said that careful stock management and reduced discounting is helping to improve profit margins.

However, the firm’s international expansion appears to have hit a speed bump. Despite a 7.9% increase in international retail space over the last 15 weeks, sales fell by 4.8% during the same period.

This is probably the major factor behind today’s drop. If Mothercare’s total sales are falling, then the firm’s wafer-thin profit margins and its forecast P/E of 28 look increasingly unappealing.

Mothercare remains a sell, for me.

Victoria Oil & Gas

Things seem to be improving at serial underperformer Victoria Oil & Gas.

The firm debuted a new format quarterly update today, highlighting a 178% rise in gas sales from its Logbaba field during the second quarter. Average gas production has risen from 4.5 million standard cubic feet per day (mmscf/d) during the first calendar quarter of the year to 12.6 mmscf/d during the second quarter.

I was also encouraged to see that cash received for gas sales rose by 92% to $9.8m during the last quarter.

Today’s update mentioned Victoria’s reassuring $14.2m cash balance, but did not refer to net debt, which was $6.6m at the end of November.

Unfortunately, there was no information on average gas sale prices, either. I suspect these have fallen over the last year.

The problem I have is that Victoria is very slow at publishing its accounts — last year’s results were published five months after the year ended. This makes it difficult to get an accurate picture of the firm’s finances.

Although Victoria is expected to report a profit this year and trades on a 2016 P/E of 5.5, I would wait for evidence of positive cash flow before buying.

Angle

Shares in small-cap medical tech company Angle fell to a low of 86p after markets opened this morning, before recovering to around 90p.

The firm, which is developing tests for cancer, published its preliminary results today. The highlights seemed positive, confirming that the firm will begin selling ovarian cancer test kits for research use this year.

In the meantime, the figures suggest that Angle should have enough cash to keep things moving for at least another year. In the year to 30 April, Angle reported cash outgoings of £3.8m, less than half the £8.4m cash balance reported at the end of last year.

So is Angle a buy? The company says that the ovarian cancer diagnostics market could be worth £300m per year, while the overall cancer diagnostic market could be worth £8bn per year.

These are big numbers, but Angle’s product has yet to prove its commercial appeal for even one type of cancer. The firm remains a speculative buy at best, in my view.

The post Are Victoria Oil & Gas plc, Mothercare plc And Angle plc A Buy After Today’s News? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.